In the week ending March 15th 2019, a report revealed that the first two months of 2019 offered up the hedge funds industry's best returns to start a year since 2012, when average returns were at +5.78% through February of that year.
Hedge funds returned an average of +1.27% in February, according to the just-released eVestment February 2019 hedge fund return data. The positive month brings year-to-date (YTD) performance to +4.55%.
The big winners for the month were China-focused hedge funds, returning an average of +7.17% in February, bringing YTD 2019 returns to +14.17%.
Meanwhile, the Eurekahedge Hedge Fund Index gained 0.86% in February, supported by the global equity market which continued to rebound over a potential resolution of the US-China trade friction and following a challenging start to the year, and CTA Indices showed signs of improvement with over half of trend constituents in positive territory in February. The gross return of the SS&C GlobeOp Hedge Fund Performance Index for February 2019 measured 1.24% and hedge fund flows as measured by the SS&C GlobeOp Capital Movement Index advanced 0.21% in March.
Further in performance news, Crispin Odey's hedge fund plunged 10% as stock markets rebound, Lansdowne Partners, one of London's longest-established hedge fund managers, suffered a dismal 2018 after a handful of investments failed to perform, while Cadian Capital Management's fund rose 9.8 percent over the first two months of the year after posting a 20 percent gain last year and a 20.8 percent return in 2017.
In new launches, Arcline Investment Management has raised $1.5 billion for its debut fund; OP Investment Management (OPIM), a Hong Kong-based hedge fund platform, is launching Spectron FX Fund which will run fundamental, macro FX strategies through G10 currencies, while Franklin Templeton Investments Canada introduced Franklin K2 Alternatives Fund to provide investors with access to alternatives investments in a mutual fund format.
Further in new launches, AllianzGI has launched a new European infrastructure fund for external investors, the firm has announced; Venture capital firm Accel raised $2.53 billion to fund technology startups, adding to evidence of a surge in demand for risky but high-potential private investments; Osage University Partners, a Pennsylvania-based venture capital firm, closed its third fund, at $273m; Regal Funds Management has resurrected plans to raise up to $500 million via a listed investment company, adding to a rush of fund-manager raisings on the stock exchange and Dubai International Financial Centre (DIFC) has launched a $10 million fintech fund, appointing Wamda Capital and Middle East Venture Partners (MEVP) to manage it.
Meanwhile, San Francisco-based growth stage venture capital firm 137 Ventures, which buys shares in private tech companies from founders and employees, has announced the closing of its fourth fund at $210 million; Aberdeen Standard Investments (ASI) and JPMorgan Mansart have partnered for the launch of a European equity fund, the two firms have announced; Empira Group, investment manager for institutional real estate investments in German-speaking Europe, has launched Empira Real Estate Finance fund IV, the company's fourth debt fund by now and Alpine Investors, a software- and services-focused midmarket firm, is seeking $750 million for its newest fund, according to a filing with the Securities and Exchange Commission.
State Street Quarterly Brexometer index reveals the latest investor sentiment towards Brexit, which showed investor appetite for holdings of UK assets has polarised during Q1 2019.
In investments made by hedge funds, Nelson Peltz's hedge fund has trimmed its position in fast-food chain Wendy's, on whose board Peltz serves as chairman; Hedge funds have been buying U.S. stocks as institutional investors keep up their selling streak, according to Bank of America research; A US hedge fund H/2 Capital Partners has handed the UK's biggest care homes operator a GBP40 million ($52.61m) lifeline as it readies the group for a sale, while hedge funds have doubled their bets against Royal Mail in just over a month as the City worries about the fate of its dividend.
In the meantime, D1 Capital Partners is betting against German athletic brand Adidas, placing a "rare" bet worth about €216 million ($243 million) that its shares will go down; Fund managers appear to be betting that the long economic recovery and bull market will continue to age well; Many managers sold out last year, but the Chinese e-commerce giant was a top gainer for those who stayed the course; U.S. technology stocks this week took back their title as the stock market's most profitable bet of the year, and the so-called FANG stocks have regained their shine after investors dumped the high-flying group in December over fears that the decade-old bull market was dying, while investors who have shunned risky assets since Christmas better start embracing them, according to JPMorgan Chase strategists led by Marko Kolanovic.
In miscellaneous hedge fund news, New Jersey-based alternative investment firm Spring Valley Asset Management (SVAM) announced the launch of the SVAM Diversified Alpha Portfolio, a multi-dimensional, systematic trading system; Bad Homburg, Germany-based Feri Alternative Assets GmbH reported especially strong demand in the alternative investments sector in its financial report for 2018 and the alpha generated by hedge funds, and more generally by active managers, is influenced by multiple factors, pointed out Lyxor in its Weekly Brief.
Meanwhile, EnTrustPermal - one of the world's largest hedge fund investors and a leading alternative asset manager headquartered in New York and London - announced that it has rebranded the firm as EnTrust Global; Singapore-based AI open-platform fund manager Noviscient has been selected as one of eight winners and the first Asian startup to join the Copenhagen Fintech Accelerator; Argentiere Capital is returning capital to investors from its flagship $940 million hedge fund after years of unsuccessful wagers on rising market turmoil; A once-lucrative business within Deutsche Bank AG catering to hedge funds is on its way to becoming yet another casualty of the German lender's chronic turmoil; Bfinance Australia's Vishal Sharma says underlying conditions are improving for the macro strategies, but with performance varying greatly from one fund to the next, selecting the right manager is key to successful investing in the sector and Man Group's 2018 results reflected a "more difficult" year for asset management, but Luke Ellis, chief executive, said investment performance for Man was still better than its peers. Funds under management fell from $109.1 billion in 2017, to $108.5 billion.
In institutional investor news, Los Angeles Fire & Police Pension System committed a total of $42.5 million to two alternative investment funds, according to a report on the $21.3 billion pension fund's website; The $44 billion Texas Permanent School Fund is the largest education endowment in the country, but the state's public schools are seeing less money than they did decades ago; State of Michigan Investment Board disclosed a total of $1.5 billion in fourth-quarter commitments for the $69.5 billion Michigan Retirement Systems, East Lansing, in materials, while, Pennsylvania Public School Employees' Retirement System, Harrisburg, agreed to commit up to $516 million to five alternatives investment funds and retained its investment consultant for its defined benefit and defined contribution plans.
In the meantime, Nashville (Tenn.) & Davidson County Metropolitan Government Employee Benefit Trust Fund made three new commitments totaling $130 million; Danish pension fund PensionDanmark has merged its alternatives and private debt departments in a move aimed at bringing efficiency benefits as well as added flexibility in investments; Finland's largest pension fund suffered a 3% investment loss last year, with the market value of its assets contracting by EUR1.8bn ($2.04bn) during 2018. Keva's assets fell to €50.1bn by the end of December 2018, compared with €51.9bn a year earlier, and the $193.7 billion New York City Retirement System (NYCRS) has expanded its in-house emerging managers program in private equity by $600 million, raising the total assets dedicated to the program to more than $1.5 billion.
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